New Plastic Pallet to Provide Pågen with SEK 7 Million Annual Saving

Pågen AB is Sweden’s leading bakery. With production in Malmö and Gothenburg, on a daily basis it distributes product from Ystad in the south and to Kiruna in the north of Sweden, resulting in 545,000 pallets used per year.

During the spring of 2011, the company Pågen is switching to a new patent pending plastic pallet system, developed by IP-Group, Halmstad, according to a company release. The Swedish manufactured plastic pallets are made of one component material which gives superior friction. The expected lifetime is estimated to 8-10 year during normal use.

The integration of IPG’s plastic pallet in Pågen’s production flow has exceeded expectations. “After some minor adjustments, the pallet has worked very well in pallet staplers, runway strips, pallet racking, during forklift handling and transportation,” says Ulf Karlsson, Pågen’s Logistics Manager.

Pågen´s calculations show that the annual cost will decrease by 40%, which means annual savings of approximately 7MSEK.

IPG’s plastic pallets are nestable for empty transport which means 30 pallets per pallet space instead of 18 wooden pallets. Since the plastic pallets require considerably less storage space, Pågen is able to reduce the number of return transports considerably.

“Pågen saves money from day one through cost effective return transports,” Karlsson commented. “Also the IPG pallet is climate smart, considering that Pågen now annually need 253 fewer full trucks with trailers.”

For Pågen, repairs and loss of wooden pallets has historically been a high cost, but that will now basically diminish, the release indicated, although it did not mention specific steps to be taken to ensure control of the new pallets. Continuing, the release noted that the plastic pallet has a low weight, which improves the working conditions for Pågen’s employees. It also has a high friction for safe cargo handling and is equipped with RFID to control Pågen´s flows.

“Together with IP-Group we have made careful calculations and tests in order to find the pallet system that pays off for us in the long run”, said Karlsson. His recommendation is to compare the total cost of wooden versus plastic pallets and, in doing so, to have a logistics firm analyze the whole flow of pallets in order to better understand total cost implications.

“As of today we are only using the full pallet and with IPG:s complete pallet system, we are able to in the future also introduce half- and quarter pallets in the same system,” he concluded. “All of them stackable with each other.”